Austria Contributing firm DLA Piper Weiss-Tessbach Rechtsanwälte GmbH Author Alexander Cizek The latest statistics for 2011 on the seizure of counterfeit goods, published by the Austrian customs authorities, show that the number of incidents in which counterfeit goods were seized and ultimately kept in detention rose to a historical peak of 3,201, which mirrors prevailing international trends. The only sign of improvement was a significant drop in the amount of seized counterfeit articles to 97,957, with a total value of 5.3 million. However, by contrast, there was an alarming increase of 59% in pharmaceutical counterfeits in Legal framework The EU Customs Regulation (1383/2003) and the corresponding implementation regulation (1891/2004) standardise border seizure proceedings within the European Union and are thus applicable in Austria. In addition, the Product Piracy Act contains provisions governing border seizure. The various IP rights that entitle rights holders to border seizure and other anticounterfeiting measures are laid down in several national codes which provide for proper protection of intellectual and industrial property. Further, several EU regulations in this field apply directly. The main substantive IP laws in Austria are as follows: the Trademark Protection Act; the EU Trademark Regulation (207/2009); the Design Protection Act; the EU Design Regulation (6/2002); the Patent Code; the Utility Model Act; and the Copyright Act. The Unfair Competition Act is also relevant with regard to internet service providers liability, as is the E-commerce Act. The Rules of Jurisdiction and the Code of Civil Procedure govern proceedings in civil matters. Moreover, the above-mentioned Austrian IP laws contain criminal law provisions with regard to the protection of intellectual property. In addition, certain provisions of the Criminal Code, in particular the Code of Criminal 70 Anti-counterfeiting 2013 A Global Guide Austria Procedure, apply where wilful infringement has taken place. Border measures As stated above, the EU Customs Regulation, its implementing regulation and the Product Piracy Act govern border seizures in Austria. The core elements of these proceedings are: a motion for official action to be filed with the customs authorities; seizure of counterfeit goods; and opposition proceeding. Generally, rights holders must file a motion with Customs in order for the latter to intervene. The motion requests Customs to inspect suspect goods to determine whether they are counterfeit and then to seize them if they are. Thus, providing Customs with additional information on identifying features and distribution channels will help it to identify counterfeits. A border seizure order is valid for one year and can be repeatedly renewed for the same term. Customs will also act on the basis of an EU border seizure order. Once goods have been identified as counterfeits traded on a commercial scale or at least are suspected as such, Customs may seize them and temporarily suspend their release. Seizure may also be ordered by the tax authorities if the import of counterfeits amounts to tax fraud. In the event of a customs seizure, the rights holder and the consignee or declarant of the shipment will be notified. The rights holder may request the names and addresses of the consignor and consignee, as well as data regarding the origin and provenance of the goods. Further, the rights holder is entitled to: inspect the seized goods; take photographs; and receive samples. Within 10 working days of notification (which can be extended for an additional 10 working days), the rights holder must initiate a legal action either civil or criminal to prevent the detained goods from being released. For perishable goods, any action must be filed within three working days. The consignee or declarant of the shipment may object to the seizure within 10 working days of notification. Otherwise, or in the event that the consignee or declarant consents, the goods will be destroyed by, or under the supervision of, the customs authorities provided also that the rights holder: confirms that the seized goods are counterfeit; and consents to their destruction. The costs of destruction are borne by the rights holder, although it may later seek to recover such costs from the counterfeiter. With the rights holder s consent, the goods can also be made available to charitable institutions. If an objection has been raised and court proceedings are not timely initiated, Customs must lift the seizure and release the goods. Otherwise, the seizure will be maintained until a final court decision has been rendered. Finally, importing or exporting counterfeits may constitute a tax offence, incurring a penalty of up to 4,000 ( 15,000 in the event of wilful commission), as well as forfeiture of the counterfeits. Criminal prosecution The substantive IP laws, rather than the General Criminal Code, provide that wilful IP infringement is a criminal offence. The Code of Criminal Procedure sets out the procedural rules for pursuing counterfeiting by means of criminal prosecution. A general advantage of criminal proceedings is the right to a search warrant, which may yield further evidence or even reveal a larger scale of counterfeiting activities. If other counterfeit goods are found during the search, they may be seized immediately. However, criminal proceedings do not provide for (preliminary) injunctive relief only for punishment of the counterfeiter along with forfeiture and destruction of the counterfeits. In certain circumstances, publication of the verdict may also be obtained. In straightforward cases, the judge can award damages for the injury suffered by the rights holder. However, it is not uncommon that the judge refers the rights holder to civil law proceedings in this respect. Unlike in many other jurisdictions, in Austria, the criminal offence of wilful infringement is viewed as a private prosecution; therefore, the rights holder itself is responsible Anti-counterfeiting 2013 A Global Guide 71 DLA Piper Weiss-Tessbach Rechtsanwälte GmbH for filing and pursuing criminal charges. The time limit for criminal charges is generally one year, or five years in the case of recurring offences. The penalty prescribed by most statutory IP laws for wilful infringement ranges from a fine of up to 360 daily rates or up to two years imprisonment, in the case of recurring infringement. One daily rate may vary from a minimum of 4 to a maximum of 5,000, depending on the infringer s economic strength. Pre-trial investigation proceedings are no longer available to private prosecutors. This means that the rights holder must review the case and evaluate the available evidence carefully before initiating criminal proceedings; it can no longer file motions for preliminary measures against the suspect to obtain further evidence without having the suspect officially charged with a misdemeanour or a crime. The private criminal action must correspond to the requirements of a public prosecutor s charge. Further, the private prosecutor must explain why it is entitled to bring charges. The private prosecutor may also apply for a search and seizure warrant and other appropriate measures. However, such warrants require the court s approval and must be based on legitimate grounds. Moreover, if the suspect cannot be convicted (eg, since its intent could not be proven beyond any doubt), the rights holder may still seek independent criminal forfeiture and destruction of the counterfeits. Criminal charges for IP rights infringement must be brought before the court in the place where the offence has been committed. However, the Vienna Criminal Court has exclusive jurisdiction in cases of wilful infringement of patents, utility models, designs, Community trademarks or Community designs. The outcome of the case will determine the issue of legal costs. If the prosecuted party is convicted, it must also reimburse the private prosecutor s legal costs. If the criminal charges against the suspect are dismissed or the criminal proceedings do not result in a conviction, the party that brought the private prosecution will be ordered to pay the legal costs. Both the defendant and the plaintiff may appeal the verdict before the regional court of appeals. Civil enforcement An aggrieved rights holder can also choose from an array of claims to bring in a civil court. These include: injunctive relief; removal of the infringing goods and the tools necessary for their production; adequate compensation, irrespective of negligence; and publication of the injunction element of the judgment. Further, in cases of negligence, the rights holder can claim either damages (including lost profits) or the delivery up of the assets realised by means of the infringement instead of adequate compensation. In the event of wilful infringement or gross negligence, the rights holder may claim double remuneration (ie, twice the sum of adequate compensation), irrespective of proof of the damage suffered. In certain circumstances, the rights holder may also claim compensation for any immaterial damage inflicted. In addition, the rights holder is entitled to: a rendering of accounts so as to be able to quantify the damage claimed; and detailed information on the origin, size or volume, prices and distribution channels of the counterfeit goods, including the personal data of any party which possessed or traded the counterfeits on a commercial scale. Payment claims, such as claims for compensation, are subject to a limitation period of three years on notice of the infringement. The same applies for injunction claims. For certain criminal misdemeanours, such as acts of wilful infringement, a longer limitation period of 30 years may apply. Civil lawsuits for IP rights infringements are brought in the commercial courts or commercial divisions of the regional courts which have jurisdiction over IP rights infringement cases. Disputes involving patents, utility models, designs, Community trademarks or Community designs are heard exclusively by the Vienna Commercial Court. In addition, the Unfair Competition Act provides for similar claims against engaging in unfair, aggressive or misleading commercial 72 Anti-counterfeiting 2013 A Global Guide Austria Unlike in many other jurisdictions, in Austria, the criminal offence of wilful infringement is viewed as a private prosecution; therefore, the rights holder itself is responsible for filing and pursuing criminal charges conduct or practices, such as misrepresentation of ownership of IP rights or slavish imitation of products. The commercial courts or commercial divisions of the regional courts also have jurisdiction over these disputes. However, in contrast to trademark claims, the statute of limitations with respect to injunction claims in unfair competition cases lapses after only six months. The court s judgment is subject to appeal to the respective court of appeals; there is a restricted right of second appeal to the Supreme Court, for which prior leave must be granted by an appeal court or the Supreme Court. Most substantive IP laws provide for preliminary measures and so does the Enforcement Act. Since the implementation of the EU IP Rights Enforcement Directive (2004/48/EC) in 2006, rights holders can benefit from preliminary measures for other claims (eg, removal, adequate remuneration, damages and delivery up of the assets), in addition to preliminary injunctive relief. The preliminary measures are designed to secure both the claim and evidence until a final decision is handed down in full-scale proceedings. Such preliminary orders are subject to appeal and the additional remedy of an objection if the defendant was denied the chance to comment on the motion. Usually, the legal remedies in preliminary proceedings do not suspend enforcement of the preliminary injunction, but exceptions may be granted on a separate motion. Anti-counterfeiting online The E-commerce Act provides for freedom of access, meaning that no additional authorisation is required for a supplier to offer products online. In other words, the supplier needs only to observe the same requirements as when products are offered offline. However, the supplier s website must contain detailed information about its name, address and , as well as the prices of its products and shipment costs. As a matter of statutory law, Austrian IP laws stipulate that an offer of counterfeit goods (including bids via electronic media) constitutes an act of infringement. Moreover, the Unfair Competition Act categorises the online advertisement of pirated goods as an unfair trade practice in terms of an IP rights infringement. As a matter of case law, the Supreme Court has deemed that the launch of a website advertising and offering for sale counterfeits infringes IP rights. This view applies even if the domain name is registered abroad, because a link with Austria is evident from the fact that the site can be accessed via the Internet in Austria. However, the court also ruled that appropriate disclaimers on a website may exclude the possibility of bringing an action before the Austrian courts. The relevant host provider may be made liable for IP rights infringement unless: it was unaware of the content and the infringing conduct on the website; or it blocked the website immediately after becoming aware that the goods on offer were counterfeit. Pursuant to the E-commerce Act, there is no general obligation for providers to monitor the content they provide. For cease and desist claims, it is a prerequisite that the provider was made aware of the infringement by the third party. This is generally not the case, according to Supreme Court case law, Anti-counterfeiting 2013 A Global Guide 73 DLA Piper Weiss-Tessbach Rechtsanwälte GmbH unless the provider has been notified by the rights holder (eg, through a warning or ceaseand-desist letter). After having received such notification, the provider will be basically liable for the infringement, provided that it is obvious to a layperson. However, the provider may avoid liability if it blocks immediately access to the infringing content after receiving the notification or warning letter. Moreover, in the context of a website blocking injunction, the Supreme Court recently referred to the European Court of Justice for a preliminary ruling on the question of whether a party offering copyright and related rights infringing material on a website is using the services of its end users access providers. If answered affirmatively, the access provider will be liable as an intermediary, even if it has no connection whatsoever with the infringer. Further, according to case law and recent amendments to the Telecommunications Act, which implemented the EU Data Retention Directive into Austrian law, the provider is not obliged to disclose information about the holder of a dynamic internet protocol address, as such data cannot be legally retained. Large companies are increasingly choosing to monitor their supply chains, controlling their relationships with contractors and reshaping contracts and licence agreements accordingly. The use of electronic devices is also being considered by numerous businesses, but many do not pursue this course of action due to budgetary constraints. However, technology is increasingly being used, particularly by larger organisations, to authenticate goods and monitor procedures. Private investigators may also be considered and often prove useful in locating known but evasive counterfeiters, or in discovering and recording counterfeiting or infringing conduct. Test purchases and copies of website print-outs may also be arranged by private investigators or a local attorney. The services of local legal counsel with special expertise in anticounterfeiting should be retained, at least from the point at which the rights holder obtains (sufficient) proof of counterfeiting activity in Austria. WTR Preventive measures/strategies The most widely used preventive measure in Austria is the border seizure order. Precise up-to-date information regarding the originals, detailed identification features and distribution channels enables Customs to identify counterfeits and facilitate seizures. It is important to work closely with public authorities. Public agencies such as Customs can act not only in border seizure scenarios, but also in interstate commerce, in particular when tipped off about a consignment of counterfeits being shipped through Austria. Close cooperation with the police can also facilitate seizures based on official search warrants. Membership of or cooperation with national or international anti-counterfeiting agencies helps to further the exchange of valuable information and assist in the fight against internationally organised gangs of counterfeiters. Further preventive measures lie with the respective rights holder and often depend on the availability of sufficient funds. In particular, IP rights holders often run market studies and activities to enhance brand awareness. 74 Anti-counterfeiting 2013 A Global Guide Contributing profiles DLA Piper Weiss-Tessbach Rechtsanwälte GmbH DLA Piper Weiss-Tessbach Rechtsanwälte GmbH Schottenring 14 A-1010 Vienna, Austria Tel Fax Web Alexander Cizek Partner Alexander Cizek has been practising IP law since He studied law in Vienna and the United States, and was admitted to the New York Bar in 1996 and the Austrian Bar in A partner with DLA Piper Weiss-Tessbach Rechtsanwälte GmbH since 2001, he is a member of the firm s IP and technology practice group and heads the integrated product team in the Vienna office. Mr Cizek specialises in all aspects of IP law, including trademarks, brand protection, anticounterfeiting and trademark enforcement, as well as patent, design, domains, copyright and unfair competition law. He has extensive experience in anti-counterfeiting actions, including customs actions. He also has substantial litigation experience. Anti-counterfeiting 2013 A Global Guide 75

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